647 F.

2d 330

REALE INTERNATIONAL, INC., Plaintiff-Appellee,

v.
FEDERAL REPUBLIC OF NIGERIA and Central Bank of
Nigeria,
Defendants-Appellants.
No. 1272, Docket 81-7183.

United States Court of Appeals,

Second Circuit.
Argued March 6, 1981.
Decided April 16, 1981.

Abram Chayes, Cambridge, Mass. (Berthold H. Hoeniger, New York

City, of counsel), for plaintiff-appellee.
James G. Simms, New York City (Craig P. Murphy, Peter J. Dranginis,
Jr., Kissam, Halpin & Genovese, New York City, of counsel), for
defendants-appellants.
Before KAUFMAN and TIMBERS, Circuit Judges, and WARD, District
Judge.*
IRVING R. KAUFMAN, Circuit Judge:

This case is one of seven involving the Foreign Sovereign Immunities Act of
1976 ("FSIA"), 28 U.S.C. 1330, heard together on appeal and decided in
concert today.1 Six of the seven cases arise from massive purchases of cement
by the Nigerian government in 1975. This is one of those six.

Reale International, Inc., filed suit against the Federal Republic of Nigeria and
the Central Bank of Nigeria on January 4, 1978, in the Southern District of
New York. Reale's complaint claimed jurisdiction under the FSIA, and it set
forth causes of action arising out of defendants' alleged anticipatory breaches, in
1975, of a contract for the sale of cement and of a related letter of credit. The
case was assigned to Judge Haight.

On May 16, 1978, before the district court made any findings whatsoever,
indeed, before defendants even answered the complaint, the parties entered into
a stipulation. It stated that Nigeria and Central Bank had been named as
defendants in three suits then before Judge Pierce, that they had moved to
dismiss those suits for lack of subject matter jurisdiction under the FSIA, and
that they planned to make a similar motion before Judge Haight.2 Accordingly,
the parties stipulated, the jurisdictional decision in the three actions before
Judge Pierce would, in addition, determine the existence of jurisdiction in the
suit before Judge Haight.

On August 18, 1980, Judge Pierce found that jurisdiction was present in all
three cases.3 Defendants before Judge Haight then moved, in spite of the
executed stipulation, to dismiss. Judge Haight saw "no reason for abrogating
(the) agreement," and denied defendants' motion. At that point, rather than
proceeding to trial, Judge Haight certified for interlocutory appeal his order
denying the motion. We grant leave to appeal,4 and proceed to the propriety of
Judge Haight's order.

Graven in stone is the maxim that parties cannot confer jurisdiction on a federal
court by consent or stipulation. California v. LaRue, 409 U.S. 109, 112 n.3, 93
S.Ct. 390, 394 n.3, 34 L.Ed.2d 342 (1972); American Fire & Casualty Co. v.
Finn, 341 U.S. 6, 17-18, 71 S.Ct. 534, 541-542, 95 L.Ed. 702 (1951); A. H.
Emery Co. v. Marcan Products Corp., 268 F.Supp. 289, 292 (S.D.N.Y.1967),
aff'd, 389 F.2d 11 (2d Cir.), cert. denied, 393 U.S. 835, 89 S.Ct. 109, 21
L.Ed.2d 106 (1968). Behind this truism stands the federalist ethos against
expanding the judicial power of the federal courts beyond what the Framers
intended or Congress enacted. See Turner v. Bank of North America, 4 U.S. (4
Dall.) 7, 11, 1 L.Ed. 718 (1799). The proscription is enforced with draconian
zeal. See, e. g., King Bridge Co. v. Otoe County, 120 U.S. 225, 226, 7 S.Ct.
552, 553, 30 L.Ed. 623 (1887), citing Mansfield, Coldwater & Lake Michigan
Railway Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 511, 28 L.Ed. 462
(1884).

The stipulation here was not a bald covenant that jurisdiction existed; it was,
instead, an agreement that, if a certain event should come to pass, jurisdiction
would be present. Nevertheless, the compact violated the rule. It made the
jurisdictional determination hinge on nothing more than a circumstance
selected by the parties, not on whether a district court had held that jurisdiction
existed in this case under the law. The plaintiff protests that the suits before
Judge Pierce were quite similar to the case at issue here, but that is irrelevant.
The identity of the jurisdictional facts may be evident to the parties, apparent to
us, and may even be true. It is not, however, the subject of a ruling by Judge

Haight, and that is what the law requires. The parties may stipulate as to facts,
but that remains crucially distinct from a judicial determination that, upon those
facts, a federal court may hear the case.5
7

The order denying the motion to dismiss is vacated, and the case is remanded
to the district court for a proper jurisdictional determination under the FSIA. If
the circumstances of this suit are in fact similar to those in the three cases
decided by Judge Pierce and affirmed by us today,6 then Judge Haight, on
remand, should find jurisdiction present. We hold here only that the decision is
his, not the parties'.

Of the United States District Court for the Southern District of New York,
sitting by designation

The other cases are Decor by Nikkei International, Inc. v. Federal Republic of
Nigeria, 647 F.2d 300 (2d Cir. 1981); Chenax Majesty, Inc. v. Federal Republic
of Nigeria, 647 F.2d 300 (2d Cir. 1981); East Europe Import-Export, Inc. v.
Federal Republic of Nigeria, 647 F.2d 300 (2d Cir. 1981); Verlinden B. V. v.
Central Bank of Nigeria, 647 F.2d 320 (2d Cir. 1981); Texas Trading & Milling
Corp. v. Federal Republic of Nigeria, 647 F.2d 300 (2d Cir. 1981); and Gemini
Shipping, Inc. v. Foreign Trade Organization for Chemicals and Foodstuffs,
647 F.2d 317 (2d Cir. 1981)

The three suits before Judge Pierce are also part of the group of seven decided
on appeal today. They are the first three cases listed in note 1, supra

The stipulation seems to have assumed that Judge Pierce would make the same
jurisdictional decision in all three cases

28 U.S.C. 1292(b) allows interlocutory appeals when, in the opinion of the

district court, the appeal "involves a controlling question of law as to which
there is substantial ground for difference of opinion and an immediate appeal
from the order may materially advance the ultimate termination of the
litigation." The House Report to H.R. 2638, the bill adding 1292(b) to Title
28, mentions orders denying motions to dismiss for lack of subject matter
jurisdiction to be proper subjects for interlocutory appeals. See H.R.Rep. No.
1667, 85th Cong., 2d Sess. 1 (1958). The Senate Report concurs. See S.Rep.
No. 2434, 85th Cong., 2d Sess. 2-3, reprinted in (1958) U.S.Code Cong. &
Admin.News 5255, 5256. Our cases have so held. E. g., Leasco Data
Processing Equipment Corp. v. Maxwell, 468 F.2d 1326, 1330 (2d Cir. 1972);
Movielab, Inc. v. Berkey Photo, Inc., 452 F.2d 662, 663 (2d Cir. 1971) (per

curiam); Blackman v. Hadron, Inc., 450 F.2d 781, 782 (2d Cir. 1971) (per
curiam)
5

In Railway Co. v. Ramsey, 89 U.S. (22 Wall.) 322, 327, 22 L.Ed. 823 (1874),
Chief Justice Waite stated, "Consent of parties cannot give the courts of the
United States jurisdiction, but the parties may admit the existence of facts
which show jurisdiction, and the courts may act judicially upon such an
admission." See also Verzosa v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
589 F.2d 974, 977 (9th Cir. 1978) (per curiam)

See notes 1 and 2, supra